The First Round of Magnificent Seven Earnings Is Giving Tech Investors Reason to Stay Bullish
Big Tech’s report card is here — and the top of the class is already showing off. Microsoft and Meta kicked off earnings season with standout results that have set a high bar for the rest of the Magnificent Seven. Microsoft logged 18% revenue growth, while Meta posted a 22% jump — early signals that Big Tech’s AI bets are starting to deliver.
- Microsoft’s Azure cloud services rose 39% year-over-year, helping overall cloud revenue reach $46.7B thanks to an AI-fueled cloud surge.
- Meta’s advertising revenue climbed to $46.6B with CEO Mark Zuckerberg expressing excitement about building “personal superintelligence for everyone in the world.”
High capex, higher hopes: Despite the spending backlash, tech isn’t slowing its AI push. Meta expects capex to climb $30B above last year and warns that 2026 spending will rise even faster. But as BlackRock’s Tony DeSpirito points out, “Historically, high or rising capex is a negative factor, but the more profitable the company is, the more it turns into a positive factor” — which helps explain why Microsoft, despite heavy AI investments, still returned $9.4B to shareholders in dividends this quarter. The real test comes this week as the rest of the Magnificent Seven report and investors gauge whether the AI boom can keep valuations aloft.
